Thomson Medical Group’s Kiat Lim leads acquisition of FV Hospital
Investment paves way for the Group’s expansion across Southeast Asia.
![Photo: FV Hospital](https://media.vneconomy.vn/w800/images/upload/2023/07/12/fvhospital-jul-2021.jpg)
The SGX Mainboard-listed healthcare group Thomson Medical Group Limited (TMG) announced on July 12 that it has agreed to acquire Vietnam’s FV Hospital for up to $381.4 million, marking the country’s biggest healthcare transaction to date and Southeast Asia’s largest healthcare acquisition since 2020.
The deal highlights the growing significance of Vietnam’s burgeoning healthcare market and TMG’s continued commitment to expand its footprint in the region.
Under the terms of the sales and purchase agreement, TMG has agreed to acquire 100 per cent of Far East Medical Vietnam Limited (FEMV). FEMV operates a range of healthcare facilities in Vietnam, including the multi-disciplinary tertiary FV Hospital and a network of primary and specialist clinics.
Based on the Initial Consideration of approximately $359.6 million and after price adjustments, this translates into an enterprise value (EV) of $328.5 million. Based on the FY2022 EBITDA of $19.5 million, this translates into an EV / EBITDA of 16.8x. The purchase will be funded via the Group’s internal resources and external borrowings from financial institutions and debt capital markets.
“The acquisition of FV Hospital deepens our commitment to the Southeast Asian healthcare sector, expanding our Group’s presence across three of the region’s most important geographies in healthcare,” said Mr. Kiat Lim, TMG’s Executive Vice-Chairman, who first initiated discussions with FV Hospital some six months ago. “FV Hospital provides a strategic foothold for us in Vietnam and a gateway to grow and focus on future investments in this fast-growing market.”
FV was founded by Dr Jean-Marcel Guillon in 2003 with a group of French physicians who shared the vision of bringing world-class healthcare to Vietnam. Located in the burgeoning District 7 in Ho Chi Minh City, FV Hospital has evolved into a full-service, one-stop provider of quality healthcare for patients locally as well as from Cambodia.
FV Hospital was the first Joint Commission International (JCI)-accredited hospital in southern Vietnam, and has been accredited twice over; testament to its commitment to clinical quality and patient-centric service across its decades-long history.
It provides care across over 30 medical specialties, including oncology, cardiology, ophthalmology, orthopedics, maternity, and gastroenterology. It had close to 200 operating beds as of December 31, 2022, and is currently undertaking an expansion that will entail a seven-floor structure appended to the existing FV Hospital building (H Building).
H Building will house an extension of the cancer center, with the addition of advanced capabilities like PET scan, a CyberKnife, and a bone marrow transplant unit. It will also be home to new activities like IVF and dialysis, and the extension of outpatient services in cardiology, urology, maxillo-facial, and gastroenterology.
The FV Group currently has over 1,600 staff, which includes more than 200 Vietnamese and expatriate doctors. FV Hospital also operates, since 2013, an outpatient clinic known as FV Saigon Clinic in the heart of District 1, Ho Chi Minh City’s traditional business district. The American Chiropractic Clinic Ltd (ACC) business consists of a network of four clinics around Vietnam, which was acquired in 2022 to allow for expansion into chiropractic services and the development of sports medicine.
“We would like to express our appreciation for the support and collaborative partnership we have had with Quadria,” said Dr. Jean-Marcel Guillon, Founder and CEO at FV Hospital. “Together, we have embarked on a journey that has helped propel FV to its current position as a leading healthcare provider in Vietnam. With the support of Thomson Medical moving forward, I am incredibly excited for the next phase of FV’s growth journey. Together, we will continue to chart a path of continued success and shape the future of healthcare in Vietnam.”
As TMG’s largest strategic acquisition, FV Hospital unlocks a sizeable Vietnamese opportunity for the Group, paving the way for further inroads into one of Southeast Asia’s fastest-growing healthcare markets.
Vietnam’s growing private healthcare market has been driven by favorable macro-economic tailwinds, with significant growth potential in healthcare expenditure. Vietnam is one of the fastest growing economies in Southeast Asia, fueled by strong inflows of FDI given its geographical and competitive advantages, which underpins the strong growth in healthcare expenditure. Vietnam has recorded strong historical gross domestic product growth, with a compound annual growth rate (CAGR) of around 8.6 per cent in the 2017-2022 period, posting a healthcare expenditure CAGR of around 9.2 per cent in the period.
Rising healthcare demand in Vietnam is fueled by a rising middle class, an ageing population, as well as an expanding expatriate population. The country is well on its way towards its goal of becoming an upper-middle-class country by 2035 and a high-income country by 2045, given that it has the seventh-fastest growing middle class globally and will add 36 million to its middle class by 2030. Vietnam’s population also officially entered an ageing phase in 2017, and is among the most rapidly ageing countries in the world.
Life expectancy is 75.4 years, and senior citizens may account for more than 17 per cent of Vietnam’s population by 2030. In terms of expats, the country was home to approximately 101,550 in 2021, up from an estimated 83,500 in 2019, according to Ministry of Labor statistics.
Further underpinning the industry’s robust outlook is Vietnam’s rise as a medical tourism destination, thanks to solid demand from neighboring countries such as Cambodia, Laos, and Myanmar. Medical tourism in the country is estimated to generate annual revenue of approximately $2 billion a year, with recent years seeing an influx of about 300,000 foreign tourists annually for medical checkups and treatment, 40 per cent of whom are concentrated in Ho Chi Minh City. Ho Chi Minh City and the Mekong Delta together make up approximately 30 per cent of Vietnam’s estimated 97 million population.